Research-Studie


Original-Research: Expedeon AG - von GBC AG

Einstufung von GBC AG zu Expedeon AG

Unternehmen: Expedeon AG
ISIN: DE000A2YN801

Anlass der Studie: Research Comment
Empfehlung: BUY
Kursziel: 3.20 Euro
Kursziel auf Sicht von: 31/12/2020
Letzte Ratingänderung:
Analyst: Cosmin Filker, Marcel Goldmann

Sale of the immunology and proteomics divisions will net EUR120 million
(EUR2.29 per share), DNA business is to be expanded

On 11/11/2019, Expedeon AG reached an agreement with antibody online
distributor Abcam plc for the planned sale of the immunology and proteomics
businesses. If the deal is approved at the extraordinary general meeting
set for 19/12/2019, the transaction is expected to be closed on 01/01/2020.
According to the agreement, a total purchase price of EUR120 million (in
cash) is to be paid for the purchase of the two divisions, with EUR105.6
million payable immediately and EUR14.4 million paid over a two-year
period.

The business segments about to be sold were acquired by Expedeon AG in
recent financial years as part of intensive M&A activities. Starting with
the purchase of the now eponymous proteomics specialist Expedeon in 2016,
the electrophoresis equipment provider C.B.S. Scientific was purchased in
late 2016. These acquisitions were followed by the purchase of protein
measurement companies Innova Biosciences (2017) and TGR Biosciences (2018).
The total purchase price for these four companies is EUR39.8 million, i.e.
appreciably less than the sale price of around EUR120 million that will now
be realised. Expedeon AG's current market capitalisation of EUR83.2 million
would also be significantly exceeded with the purchase price.

According to our findings, the divisions and products to be sold account
for around 90% of Expedeon's annual sales and should make a sharply
positive earnings contribution. With annual sales of these products
expected to be around EUR14.4 million for 2019, this would represent a
purchase price multiple exceeding 8.

After the planned deal is finalised, the product area of the 'genomics'
segment is to remain in Expedeon AG (the name of which is proposed to be
changed to '4BaseBio AG' at the general meeting) with the key products
TruePrimeTM, SunScript(R) and with products of the electrophoresis sector
of the former C.B.S. Scientific. The operating figures for the coming
financial year would also be marked by the loss of the major part of the
sales proceeds and earnings contribution. In 2020, the company should post
only around 10% of the current revenue level, or around EUR1.6 - 2.0
million. From the current standpoint, however, we cannot yet estimate the
actual impact, and for this reason we are not changing our previous
forecasts for the time being (see Research report dated 07/10/2019). The
company specifically expects that overall 38% of the operating assets will
not be sold. US subsidiary Expedeon Inc. is not to be included in the sale
assets, but is to be transferred prior to the sale from Expedeon Holdings
Ltd. to Expedeon AG.

According to the company, the future focus will be on the proprietary
technology TruePrimeTM, and specifically on the expansion of GMP-certified
production of DNA. This is to be supplied to pharma and biotech companies
which need large quantities of good quality DNA for the production of gene
therapies or gene vaccines. To complement this, additional products and
technologies are to be acquired as part of a buy&build strategy. Expedeon's
management has, with its previous M&A successes, delivered proof of concept
for the success of this strategy. According to the company's management
board (company presentation), up to EUR13.5 million in revenues are
expected to be generated by 2022 in the gene therapy and diagnostic
business areas.

If the deal is successfully completed, as we assume it will be, Expedeon AG
would have cash and cash equivalents of EUR120 million (incl. cash inflow
in the next two years), resulting in significant financial leeway. This
would be equivalent to liquidity of EUR2.29 per share, which in our view
now represents the valuation floor for the Expedeon share. Until we can
concretely estimate the remaining business, we also confirm our previous
price target of EUR3.20 per share. We continue to assign it a BUY rating.

Die vollständige Analyse können Sie hier downloaden:
http://www.more-ir.de/d/19541.pdf

Kontakt für Rückfragen
Jörg Grunwald
Vorstand
GBC AG
Halderstraße 27
86150 Augsburg
0821 / 241133 0
research@gbc-ag.de
++++++++++++++++
Offenlegung möglicher Interessenskonflikte nach § 85 WpHG und Art. 20 MAR. Beim oben analysierten Unternehmen ist folgender möglicher Interessenkonflikt gegeben: (4,5a,7,10,11); Einen Katalog möglicher Interessenkonflikte finden Sie unter:
http://www.gbc-ag.de/de/Offenlegung.htm
+++++++++++++++
Date of completion/Date of first distribution (german version):
13/11/19 (1:56 pm) / 14/11/19 (9:30 am)
Date of completion/Date of first distribution (english version):
03/12/19 (09:47 am) / 03/12/19 (11:00 am)

-------------------übermittelt durch die EQS Group AG.-------------------


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